What is a custody fee?

Definition: ​In RIA context, this typically refers to when a custodian prices the custodial services they provide for an RIA based on the RIA’s level of client assets held at the custodian. The fee is typically expressed as basis points (bps) on the assets.

The fee is sometimes alternatively referred to as “asset based pricing.”

When used in an RIA context: “The custodian charges the RIA a 5bps custody fee for the provided custodial services.”

See also: Episode #23, Asset Based Pricing